The effects of a tax deduction for lifelong learning expenditures

Wiljan van den Berge; Egbert Jongen; Karen van der Wiel

doi:10.1007/s10797-022-09736-y

The effects of a tax deduction for lifelong learning expenditures

Wiljan van den Berge^*, Egbert Jongen, Karen van der Wiel

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

We study the effects of a tax deduction for lifelong learning, exploiting exogenous variation in the effective costs of lifelong learning due to jumps in tax bracket rates. We use a regression kink design and tax return data on the universe of Dutch taxpayers. Low-income individuals show no response, but high-income individuals are more likely to report lifelong learning expenditures (though not a higher amount) when net costs are lower. Furthermore, for high-income individuals the effect peaks at the age interval 40–45 years of age.

Original language	English
Pages (from-to)	729–756
Number of pages	28
Journal	International Tax and Public Finance
Volume	30
Issue number	3
Early online date	9 May 2022
DOIs	https://doi.org/10.1007/s10797-022-09736-y
Publication status	Published - 2023

Bibliographical note

Funding Information:
We thank the editor David Agrawal, two anonymous referees and Simon Jäger, Pierre Koning, Hessel Oosterbeek, Ted Reininga, Daniël van Vuuren and seminar and congress participants at Bentley College, Boston University, CPB Netherlands Bureau for Economic Policy Analysis, the Dutch Ministry of Education, Statistics Norway, Tilburg University, and NED, ESPE, IIPF and EALE conferences for invaluable comments and suggestions. Remaining errors are our own. We are grateful to the Dutch Ministry of Social Affairs, the Ministry of Finance and the Ministry of Education, Culture and Science for funding this research.

Funding Information:
Van den Berge gratefully acknowledges funding from Foundation Instituut Gak.

Funding Information:
We thank the editor David Agrawal, two anonymous referees and Simon Jäger, Pierre Koning, Hessel Oosterbeek, Ted Reininga, Daniël van Vuuren and seminar and congress participants at Bentley College, Boston University, CPB Netherlands Bureau for Economic Policy Analysis, the Dutch Ministry of Education, Statistics Norway, Tilburg University, and NED, ESPE, IIPF and EALE conferences for invaluable comments and suggestions. Remaining errors are our own. We are grateful to the Dutch Ministry of Social Affairs, the Ministry of Finance and the Ministry of Education, Culture and Science for funding this research.

Publisher Copyright:
© 2022, The Author(s).

Funding

Van den Berge gratefully acknowledges funding from Foundation Instituut Gak. We thank the editor David Agrawal, two anonymous referees and Simon Jäger, Pierre Koning, Hessel Oosterbeek, Ted Reininga, Daniël van Vuuren and seminar and congress participants at Bentley College, Boston University, CPB Netherlands Bureau for Economic Policy Analysis, the Dutch Ministry of Education, Statistics Norway, Tilburg University, and NED, ESPE, IIPF and EALE conferences for invaluable comments and suggestions. Remaining errors are our own. We are grateful to the Dutch Ministry of Social Affairs, the Ministry of Finance and the Ministry of Education, Culture and Science for funding this research.

Keywords

Lifelong learning
Regression kink design
Tax deduction

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10.1007/s10797-022-09736-yLicence: CC BY

s10797-022-09736-yFinal published version, 1.07 MBLicence: CC BY

Cite this

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title = "The effects of a tax deduction for lifelong learning expenditures",

abstract = "We study the effects of a tax deduction for lifelong learning, exploiting exogenous variation in the effective costs of lifelong learning due to jumps in tax bracket rates. We use a regression kink design and tax return data on the universe of Dutch taxpayers. Low-income individuals show no response, but high-income individuals are more likely to report lifelong learning expenditures (though not a higher amount) when net costs are lower. Furthermore, for high-income individuals the effect peaks at the age interval 40–45 years of age.",

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The effects of a tax deduction for lifelong learning expenditures

Abstract

Bibliographical note

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Keywords

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